Mortgage insurance is generally mandated when a owner puts less than twenty percent down of the value of a property. It protects lenders against financial loss when a homeowner fail to pay a mortgage. Although it is for the benefit of the lender, it is usually billed to the homeowner as an up-front fee and additional monthly premium. In certain cases, a lender will cover the expense of the mortgage insurance. This article provides important information on lender paid mortgage insurance for NH loans.

Important Information On Lender Paid Mortgage Insurance

Some mortgage companies will provide lender paid mortgage insurance loan alternatives in exchange for an increased interest rate. When a homeowner pays mortgage insurance directly, it stays in place while the loan amount exceeds eighty percent of the original price or updated appraised value. So at some point, the monthly payment is lowered when mortgage insurance is no longer required. With lender paid mortgage insurance loans, this reduction in monthly payment will not happen since the higher interest rate remains in effect for the life of the mortgage. The only means to change it is to refinance.

Choosing Between Owner Paid and Lender Paid Mortgage Insurance

Although the interest rate on lender paid mortgage insurance home loans may be greater, it might still lead to a lower monthly payment for some buyers. Additionally, some homeowners are unable to deduct mortgage insurance premiums on their tax return whereas mortgage interest is usually tax deductible. Therefore, opting for an increased interest rate and lender paid mortgage insurance can also result in better tax advantages for some homeowners.

Help with NH Loans

Lender paid mortgage insurance programs can be a good option for certain types of buyers. It is important to analyze the figures and understand the immediate and long-term benefits. The above is important information on lender paid mortgage insurance for NH loans and is provided only as an introduction. Contact, Customer Service at Accurate Title at 800-639-4405 or for assistance